The Theory of Constraints and How it Can Increase Your Bottom Line

The “Theory of Constraints” is an overall management philosophy introduced by Dr. Eliyahu M. Goldratt in his 1984 book entitled “The Goal”.  He created this theory to help organizations continually achieve their goals.

The title comes from the contention that any system, or business, will have constraints and for them to continue to grow they must unblock or work around the constraint.

It is based on the use of Five Focusing Steps.

1) Identify the constraint.

2) Decide how to exploit it.

3) Align the whole system to support the decision.

4) Elevate the constraint.

5) If, as a result of these steps, the constraint has moved, return to step one.

In “The Secret Classroom”, Coach to the Guru’s Rich Schefren talked about the similarities between constraints in your business and your body. Your body is a system just as a business is. The goal of your body is to live as long as possible. If you were to have a heart attack this would be considered a constraint or a bottleneck. In order for your body to continue towards its goal the constraint must be removed or bypassed.

It does not matter if you replaced a kidney, a liver, increased your eye sight, or took medication for arthritis, until you fix the blocked artery that caused the heart attack your body could not continue towards it’s goal.

This is an excellent example of TOC and one that really hit home with me. Think of the largest constraint in your business and how you can eliminate it or work around it. Just think of the progress you could make by doing this not one time, but over and over and over again. Your business would flourish as you constantly removed barriers to growing your business.

I found Theory of Constraints to very eye opening and helpful and I know you will as well. Do you think this will help you in your business? Leave me a comment below.

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